Japan Q2 GDP 0.5% q/q (expected 0.7%)


Japan’s economic growth data from April to June 2022.

This ForexLive Snapshot economic data

Economic data

Economic data usually comes in the form of daily press releases. This information is extremely valuable for retail and institutional traders, given the influence of this data on exchange rates. Most major economic events published are reported by sovereign governments around the world. Moreover, several economic data points are released by private organizations which can also move the market. Overall, when new information becomes available, the value of a currency pair changes to reflect a new equilibrium potentially created by traders. This information that changes the value of a currency pair can ultimately take many forms, with economic indicators or data being the primary drivers. Why Economic Data Matters in Forex Economic data is an important barometer that investors can use to measure the performance of an economy. This in turn can influence exchange rates. For example, the stronger the economic data, the more growth is likely to increase in the country, causing a currency to strengthen. If the gross domestic product (GDP) growth in the United States is high, it will help drive up the US dollar. The reverse is also true. Generally, weaker economic data can predict slower growth. The attempt of traders, when trading economic data, is to gauge how economic indicators are perceived against expectations. Before almost every economic release, the market typically assesses the median expectation reflected by analysts and economists. These known variables are simply expectations, and the unknown is the actual version. Since currency pairs can move significantly based on new data, traders always try to anticipate where the actual numbers will arrive when they come out. Changes to economic data will also filter out potential interest rate changes by a central bank. Overall, economic announcements from the United States and the Eurozone are highly watched as they will influence the perceptions of market participants who help guide interest rates and other monetary policies of the Federal Reserve or the European Central Bank (ECB) respectively.

Economic data usually comes in the form of daily press releases. This information is extremely valuable for retail and institutional traders, given the influence of this data on exchange rates. Most major economic events published are reported by sovereign governments around the world. Moreover, several economic data points are released by private organizations which can also move the market. Overall, when new information becomes available, the value of a currency pair changes to reflect a new equilibrium potentially created by traders. This information that changes the value of a currency pair can ultimately take many forms, with economic indicators or data being the primary drivers. Why Economic Data Matters in Forex Economic data is an important barometer that investors can use to measure the performance of an economy. This in turn can influence exchange rates. For example, the stronger the economic data, the more growth is likely to increase in the country, causing a currency to strengthen. If the gross domestic product (GDP) growth in the United States is high, it will help drive up the US dollar. The reverse is also true. Generally, weaker economic data can predict slower growth. The attempt of traders, when trading economic data, is to gauge how economic indicators are perceived against expectations. Before almost every economic release, the market typically assesses the median expectation reflected by analysts and economists. These known variables are simply expectations, and the unknown is the actual version. Since currency pairs can move significantly based on new data, traders always try to anticipate where the actual numbers will arrive when they come out. Changes to economic data will also filter out potential interest rate changes by a central bank. Overall, economic announcements from the United States and the Eurozone are highly watched as they will influence the perceptions of market participants who help guide interest rates and other monetary policies of the Federal Reserve or the European Central Bank (ECB) respectively.
Read this term calendar, access it here.

The times in the leftmost column are GMT.

The numbers in the rightmost column are the “previous” result (previous month/quarter, as applicable). The number in the column next to that, where is a number, is the expected consensus median.

The real one is in the box drawn on the photo.

Note that the deflator is a inflation

Inflation

Inflation is defined as a quantitative measure of the rate at which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general price level where a given currency is effectively buying less than it has in previous periods. In terms of valuation of strength or currencies, and by extension foreign currencies, inflation or its measures are extremely influential. Inflation stems from the global creation of money. This money is measured by the level of the total money supply of a specific currency, for example the US dollar, which is constantly increasing. However, an increase in the money supply does not necessarily mean that there is inflation. What leads to inflation is a faster increase in the money supply relative to the wealth produced (measured with GDP). This thus generates pressure from demand on a supply that is not increasing at the same rate. The consumer price index then increases, generating inflation. How Does Inflation Affect Forex? The level of inflation has a direct impact on the exchange rate between two currencies on several levels. This includes purchasing power parity, which attempts to compare the different purchasing power of each country according to the general level of prices. By doing so, it helps to determine the country with the most expensive cost of living. The currency with the higher inflation rate consequently loses value and depreciates, while the currency with the lower inflation rate appreciates in the forex market. Interest rates are also impacted. Inflation rates that are too high push interest rates up, which has the effect of depreciating the currency on the exchange. Conversely, too low inflation (or deflation) pushes interest rates down, which has the effect of appreciating the currency on the foreign exchange market.

Inflation is defined as a quantitative measure of the rate at which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general price level where a given currency is effectively buying less than it has in previous periods. In terms of valuation of strength or currencies, and by extension foreign currencies, inflation or its measures are extremely influential. Inflation stems from the global creation of money. This money is measured by the level of the total money supply of a specific currency, for example the US dollar, which is constantly increasing. However, an increase in the money supply does not necessarily mean that there is inflation. What leads to inflation is a faster increase in the money supply relative to the wealth produced (measured with GDP). This thus generates pressure from demand on a supply that is not increasing at the same rate. The consumer price index then increases, generating inflation. How Does Inflation Affect Forex? The level of inflation has a direct impact on the exchange rate between two currencies on several levels. This includes purchasing power parity, which attempts to compare the different purchasing power of each country according to the general level of prices. By doing so, it helps to determine the country with the most expensive cost of living. The currency with the higher inflation rate consequently loses value and depreciates, while the currency with the lower inflation rate appreciates in the forex market. Interest rates are also impacted. Inflation rates that are too high push interest rates up, which has the effect of depreciating the currency on the exchange. Conversely, too low inflation (or deflation) pushes interest rates down, which has the effect of appreciating the currency on the foreign exchange market.
Read this term indicator. The negative result is his 6th consecutive fall.

After:

  • GDP growth q/q for the 3rd consecutive quarter
  • business capex +1.4% q/q, strongest growth since Q1 2020
  • exports +0.9% q/q, up for the third consecutive quarter
  • component of private consumption also up for 3 consecutive quarters


cnbctv18-forexlive-benzinga

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